Question

Sunspot Beverages, Ltd., of Fiji uses the weighted-average method in its process costing system. It makes blended tropical fruit drinks in two stages. Fruit juices are extracted from fresh fruits and then blended in the Blending Department. The blended juices are then bottled and packed for shipping in the Bottling Department. The following information pertains to the operations of the Blending Department for June.

		Percent Completed
	Units	Materials	Conversion
Work in process, beginning	72,000	70%	40%
Started into production	358,500
Completed and transferred out	348,500
Work in process, ending	82,000	75%	25%

	Materials		Conversion
Work in process, beginning	$	26,900	$	9,400
Cost added during June	$	288,800	$	200,930

Required:

1. Calculate the Blending Department's equivalent units of production for materials and conversion in June.

2. Calculate the Blending Department's cost per equivalent unit for materials and conversion in June.

3. Calculate the Blending Department's cost of ending work in process inventory for materials, conversion, and in total for June.

4. Calculate the Blending Department's cost of units transferred out to the Bottling Department for materials, conversion, and in total for June.

5. Prepare a cost reconciliation report for the Blending Department for June.

Answer 1

Solutions:

12 Solution 1: Equivalent units of production (EUP) - Weighted Average method Units % material EUP-Materials% Conversion EUP - Conversion Units Completed and transferred out 348500 100% 348500 100% 348500 units of Ending work in process 820001 75% 61500 25% 20500 9 Equivalent units of production 410000 369000 10 11 SOLUTION 2: Cost per Equivalent unit: Material Conversion 13 Cost of Beginning Work in Process $26,900 $9,400 14 Cost added during June $288,800 $200,930 15 Total Costs $315,700 $210,330 /Equivalent units of Production 410000 369000) 17 Cost per Equivalent unit of Production $0.77 $0.57 18 19 SOLUTION 4: 20 Cost of Units Transferred Out EUP Cost per EUP Total Cost 21 Material 348500 $0.77 $268,345 22 Conversion 348500 $0.57 $198,645 Total transferred out $466,990 16 24 25 26 27 28 SOLUTION 3: Cost of ending work in process Material Conversion Total Ending work in process EUP Cost per EUP 61500 $0.77 20500 $0.57 Total Cost $47,355 $11,685 $59,040 Amount 38 $36,300 $489,730 40 35 Solution 5: 36 Cost Reconciliation Report 37 Particulars costs to be accounted for: 39 Cost of beginning WIP inventory (26900+9400) Cost added to production ($288800+200930) 41 Total Cost to be accounted for 43 Costs accounted for as follows: Cost of unit transferred out 45 Cost of Ending WIP 46 Total cost accounted for 42 $526,030 44 $466,990 $59,040 $526,030 53 et244 ) Sheet54 Sheet153 (28) Sheet578 Sheet578 (4)